The Reality of Obamacare for the Middle Class Small-Business Owner

Too often in Washington, political battles overshadow people’s reality.

As a health policy professional living in D.C., I didn’t want to fall into the trap of thinking only about the data. So I decided to ask small-business owners in my hometown of Columbia, Mo., about their experience. Here’s a story I heard that’s far too common.

One evening, a father received a call that his college-aged son was being rushed to the hospital. His son had totaled his car and needed emergency back surgery to repair a fracture to his lower spine.

After he learned his son was stable and would walk again, his concerns quickly turned to the question, “Will our health insurance cover this?”

You see, he’s a self-employed, small-business owner without a sufficient number of full-time employees to qualify for a large-group health plan.

Before Obamacare, his family had maintained individual health insurance for more than 10 years with modest annual increases. But Obamacare, in its efforts to funnel people into heavily regulated policies, made that impossible. Like many small-business owners, this self-employed family has watched their monthly premiums go from $350 to $941 per month. Their once reasonable annual deductible of $1,500 inflated to $7,500.

So in late 2016, in a desperate effort to secure a more affordable health insurance plan, this healthy family of three chose a six-month renewable, short-term insurance policy.

At the time of the son’s accident, two months remained on the short-term plan. Just two weeks after the accident, the health insurance company informed the family that their plan ended at midnight on July 1 and would not be renewed.

The father again went shopping for a new plan. The only health insurance plan available: a 60-day short-term plan.

Keep in mind, with each new plan comes a new deductible. While the premium cost was lower than their previous plan, a new deductible of $5,000 began. They will be required to renew one more time to finish out the year with health insurance coverage.

That’s three plans and three deductibles — in one year.

The risk of not having renewable coverage will force them to purchase a yearly renewable exchange plan, currently priced at $1,600 per month with a $7,500 annual deductible.

Obviously, the family will continue to pay their deductibles — their son’s health is on the line. But the financial burden is great. Their monthly health care expenditures will exceed their mortgage payment.

Sadly, his family is part of the trend. Obamacare put self-employed small-business owners and their employees between a rock and a hard place. While the plans on the exchanges are renewable, they’re outrageously expensive and consist of very narrow provider networks. The cheaper alternative is purchasing a short-term limited duration plan.

The tradeoff is, under Obamacare, there’s no guarantee your short-term plan will renew.

The Obamacare exchange in my home county is down to one insurer in 2018, Cigna. Cigna will provide a very narrow network of providers. Enrollees won’t be able to go outside the network and need a referral from their primary care physician before seeking specialty care.

If you happen to be one of the many Boone county residents whose doctors are in the University of Missouri Health Care system, with a Cigna plan you won’t get to keep your doctor — unless, of course, you want to pay the out-of-network co-pays, which won’t count toward your deductible.

In 2018, premium costs for this family of three healthy individuals (2 adults, 1 child), will total nearly $21,000 for a silver plan or $14,500 for a bronze plan. They’ll pay more and lose access to their son’s medical providers.

And what are Washington lawmakers doing to fix this problem?

President Donald Trump took an excellent first step with his executive order directing the heads of the departments of Treasury, Labor, and Health and Human Services to consider expanding short-term limited duration insurance coverage. We’ll know soon what they decide to do.

Had the executive order been in place earlier, things might have been easier for this Midwest family.

Regardless, to truly fix Obamacare’s damage, Congress must roll-back its regulations that are limiting continuous coverage, decreasing access to reasonably priced plans, and drastically increasing premiums. Trump has called on Congress to get back to work on this important priority.

The political battles will continue, but let’s remember who we’re fighting for — American families trapped in the broken individual market and in need of relief from Obamacare’s regulations.